Answer:
$936.17
Explanation:
The current market price of the bond = present value of all coupon received + present value of face value on maturity date
The discount rate in all calculation is YTM (6.12%), and its semiannual rate is 3.06%
Coupon to received semiannual = 5.3%/2*$1000= $26.5
We can either calculate PV manually or use formula PV in excel to calculate present value:
<u>Manually:</u>
PV of all coupon received semiannual = 26.5/(1+3.06)^1 + 26.5/(1+3.06)^2....+ 26.5/(1+3.06)^24 = $445.9
PV of of face value on maturity date = 1000/(1+6.12%)^12 = $490.27
<u>In excel:</u>
PV of all coupon received semiannual = PV(3.06%,24,-$26.5) = $445.9
PV of of face value on maturity date = PV(6.12%,12,-$1000) = 1000/(1+6.12%)^12 = $490.27
The current market price of the bond = $445.9 + $490.27 = $936.17
Please excel calculation attached
Answer:
390,000
Explanation:
The cost of goods sold is the expense incurred in producing goods to be sold in a period. It is abbreviated as COGS.
The cost of goods sold is calculated using the formula
COGS = opening stock + purchase/ cost of goods manufactured - ending stock
In this case:
Beginning stock = $60,000
Ending stock =$50,000
Cost of goods manufactured $380,000
COGS= $60,000 + $380,000- $50,000
COGS = $390,000
Answer:
Cant calculate
Explanation:
The National Income is the total amount of income accruing to a country from economic activities in a year's time. It includes payments made to all resources either in the form of wages, interest, rent, and profits. In this case, National income can not be calculated because data in corporate profits is missing
.
Answer: 0.9
Explanation:
The Expected Return on an investment can be calculated using the Dividend Discount Model as it is a key component in thw formula which is,
P = D1 / r - g
where,
D1 is the dividend paid next year
P is the current stock price
g is the growth rate
r is the expected return
With the given figures we have,
84 = 4.20 / r - 0.08
84 ( r - 0.08) = 4.20
r - 0.08 = 4.20/84
r = 4.20/84 + 0.08
r = 0.13
The Expected Return can be slotted into the CAPM formula to find the beta.
The CAPM formula calculates the Expected Return in the following manner,
Er = Rf + b( Rm - rF)
Where,
Er is expected return
Rf is the risk free rate
Rm is the market return
b is beta
Slotting in the figures gives,
0.13 = 0.04 + b( 0.14 - 0.04)
0.13 = 0.04 + b (0.1)
0.13 - 0.04 = 0.1b
b = 0.09/0.1
b = 0.9
Using the constant-growth DDM and the CAPM, the beta of the stock is 0.9
Answer:
moral hazard
Explanation:
Banks reduce the risk of moral hazard when they monitor and supervise how their clients are using the loans and credits made to them.
Some types of credits do not require any type of monitoring or control, e.g. a credit card which a client can use basically however he/she wants to. But other types of credit that are taken for purchasing assets, e.g. a mortgage, must be used by the bank's client to specifically carryout the intended activity.
In economics, moral hazard refers to the tendency that an economic party can engage in unusually risky activities because the capital (money) that they are investing is not theirs and the negative effects of a potential loss will be suffered most by other parties.
